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THE SCHEDULEArticles 2(1) and (2)
PENSION TRUST OF THE RAILWAYS PENSION SCHEME
1. MEANING OF WORDS USED
This Clause sets out the meaning of words used in the Pension Trust except where otherwise indicated.
| "Accrual Rate" |
means the accrual rate chosen by the Designated Employer under Clause 3D (Defined Benefit Arrangement). |
| "Actuary" |
means the actuary appointed under Clause 6B (Actuarial Valuations) and "actuarial advice" means advice given by the Actuary. |
| "Arrangements" |
means the benefit arrangements referred to in Clause 3C (Arrangements). |
| "Additional Voluntary Contributions" |
means contributions over and above a Member's normal contributions under the Scheme (if any) which the Member elects to pay to secure additional benefits. |
| "BRASS-SO" |
means the British Railways Additional Superannuation Scheme for Senior Officers. |
| "Buy-out Policy" |
means a policy of insurance or annuity contract which is appropriate for the purposes of section 19 of the Pensions Act. |
| "Children's Pension Fraction" |
means the children's pension fraction of the spouses' pension chosen by the Designated Employer under Clause 3D (Defined Benefit Arrangement). |
| "Clause" |
means a clause of this Pension Trust. |
| "Contracting-out Laws" |
means the contracting-out laws of the Pensions Act[3] (including anti-franking), and similar expressions have a corresponding meaning. |
| "Deed of Establishment and Participation" |
means the deed referred to in Clause 3B (Participating Employer establishing or participating in a section). |
| "Designated Employer" |
means the Participating Employer named in the Deed of Establishment and Participation as the Designated Employer for a Section, or in the case of the Pensioners "A" and "B" Sections it means the Secretary of State. |
| "Employee" |
has the same meaning as in the Rules. |
| "Final Average Pay" |
has the same meaning as in the Rules. |
| "Franchise Director" |
has the same meaning as in section 1 of the Railways Act. |
| "Franchise Operator" |
has the same meaning as in section 23(3) of the Railways Act. |
| "GMP" |
has the same meaning as in the Rules. |
| "Government Actuary" |
means the actuary appointed by the Secretary of State. |
| "Insurance Company" |
means an insurance company to which the Insurance Companies Act 1982[4] applies, and which is authorised by section 3 or 4 of that Act to carry on ordinary long-term insurance business as defined in that Act. |
| "Lump Sum Death Benefit" |
means the amount payable on the Member's death at the multiple of the Member's Final Average Pay chosen by the Designated Employer under Clause 3D (Defined Benefit Arrangement). |
| "Member" |
means (unless stated otherwise in the Rules) an Employee who has joined the Scheme and has not ceased to be entitled to benefits under the Scheme. |
| "Member's Contribution Rate" |
means the contribution rate chosen by the Designated Employer under Clause 3D (Defined Benefit Arrange- ment). |
| "Minimum Pension Age" |
means the age chosen by the Designated Employer under Clause 3D except in the case of the 1994 Pensioners "A" and "B" Sections and a Section governed by the rules of the Shared Cost Arrangement where it has the same meaning as in the Rules for the relevant Section. |
| "Participating Employer" |
means an employer participating in the Scheme. |
| "Pensionable Pay" |
has the same meaning as in the Rules. |
| "Pensionable Service" |
means the Member's Service after joining a Section and any additional period expressed in the Rules to be Pensionable Service. |
| "Pensions Act" |
means the Pension Schemes Act 1993[5]. |
| "Pensions Committee" |
means a pensions committee set up as described in Clause 4 (Pensions Committee) and Appendix 4 and, in the case of the 1994 Pensioners "A" and "B" Sections, Schedule 1 to the 1994 Pensioners "A" Section. References to the Pensions Committee are to the committee for the Section in question. If in relation to a particular Section (a) the Trustee is not notified that there is a Pensions Committee or (b) the Pensions Committee ceases to exist or (c) the Trustee does not delegate any powers, duties or discretions to the Pensions Committee or wholly revokes any such delegation, then all references to the Pensions Committee in this Pension Trust (other than in Appendix 4) and in the Rules are to be read as references to the Trustee. |
| "Pooled Funds" |
means the common investment funds already established by the Trustee or to be established under Clause 5G (Consultation with Pensions Committees). |
| "Preservation Laws" |
means the laws as to preservation of benefits set out in Chapter I of Part IV of the Pensions Act. |
| "Protected Person" |
means a protected person under paragraph 5 of Schedule 11 to the Railways Act. |
| "Railtrust Holdings Limited" |
means the holding company of the Trustee. |
| "Railways Act" |
means the Railways Act 1993[6]. |
| "Revaluation Laws" |
means the laws as to revaluation of benefits set out in Part IV Chapter II of the Pensions Act. |
| "Revenue Approval" |
means approval under Chapter I of Part XIV of the Taxes Act. |
| "Rules" |
means in relation to a Section the rules of that Section. |
| "Scheme" |
means the Railways Pension Scheme. |
| "Secretary of State's Guarantee" |
means the guarantee given by the Secretary of State to the Trustee under paragraph 11(1)(a) of Schedule 11 to the Railways Act. |
| "Section" |
means the 1994 Pensioners "A" Section, the 1994 Pensioners "B" Section and any other section established under Clause 3 (The Scheme Sections). |
| "Section Assets" |
means the assets attributable to a particular Section. |
| "Service" |
means (unless otherwise stated in the Rules) employment with a Participating Employer. |
| "Spouse's Pension Fraction" |
means the fraction of the Member's pension chosen by the Designated Employer under Clause 3D (Defined Benefit Arrangement) for calculating the spouse's pension. |
| "Taxes Act" |
means the Income and Corporation Taxes Act 1988[7]. |
| "Transfer Order" |
means an order under paragraph 4 of Schedule 11 to the Railways Act. |
| "Transfer Value Laws" |
means the laws as to transfer values set out in Chapter IV of Part IV of the Pensions Act. |
| "Trustee" |
means Railways Pension Trustee Company Limited. |
| "Unitised Section Assets" |
means the Section Assets represented by notional units in the Pooled Funds. |
2A Constitution
Each Designated Employer covenants with the Trustee that it shall not exercise any of its rights as a member of Railtrust Holdings Limited, including any right which would have the effect of amending the Memorandum and Articles of Association of the Trustee or of Railtrust Holdings Limited, without the prior written consent of 75% of the directors of the Trustee.
The Trustee may not resign from its office as trustee of the Scheme and section 36 of the Trustee Act 1925[8] shall not apply.
Any person may be a director of Railtrust Holdings Limited or of the Trustee and may benefit from a power which he is involved in exercising as a director of Railtrust Holdings Limited or of the Trustee regardless of whether he is also a Member or whether he has a direct or indirect interest in the Scheme or is a director of a Participating Employer.
25% of the directors of the Trustee may at any time take legal advice on legal action in relation to a Section independently of the other directors of the Trustee except that in the case of the 1994 Pensioners "A" and "B" Sections the agreement of the Secretary of State is also required. The expenses of that legal advice shall be met out of the Scheme assets, and shall be subject to a limit set by the Trustee which may be increased from time to time.
2B Delegation
The Trustee may delegate powers, duties or discretions to any person and on any terms (including the power to sub-delegate). In delegating powers, duties or discretions under this Clause the Trustee shall act in accordance with Clause 2G (Fiduciary Duty).
In particular with the consent of the Pension Committee concerned, the Trustee shall delegate the powers, duties and discretions set out in Appendix 5 to Pensions Committees. If, however:
(a) the Trustee and the Designated Employer so agree; or
(b) the Trustee is of the opinion that the Pensions Committee is unlikely to be able to perform properly any or all of the powers, duties and discretions set out in Appendix 5, then the Trustee may delegate some or none of the powers, duties or discretions set out in Appendix 5 or may delegate powers, duties or discretions, different or additional to those set out in Appendix 5. In the case of the 1994 Pensioners "A" and "B" Sections the Designated Employer is the Secretary of State.
All powers, duties and discretions exercised by or delegated to a Pensions Committee shall be exercised in accordance with its fiduciary duties to the beneficiaries of the Section concerned.
The terms of any delegation by the Trustee under this Clause (including delegation of the administration of the Scheme and delegation to a Pensions Committee) shall be set out in writing and shall be subject to a regular review following consultation with the Pensions Committee and Designated Employer concerned. The first regular review shall take place not later than 3 years after the date of establishment of the Scheme (or, in the case of delegation to a Pensions Committee, not later than 3 years after the date the Trustee first delegates to that Pensions Committee) and subsequent reviews shall be carried out at intervals of not more than 3 years.
The Trustee may revoke at any time any or all of the powers, duties and discretions which it has delegated to a Pensions Committee if it is of the opinion that the Pensions Committee in question is unlikely to be able to continue to perform properly those powers, duties and discretions.
In the event that the Trustee either does not delegate its powers, duties and discretions under Rules 13, 14 and 15 of the Pensioners "A" and "B" Sections to the Pensions Committee or revokes any of these delegations, then the Secretary of State will be entitled to appoint a representative who may attend meetings of the board of the Trustee (but who will not be entitled to vote or count towards the quorum).
2C Expenses and Charges
The Trustee shall pay the expenses of the Scheme (including its own expenses through acting as a trustee and its costs of management and administration and the expenses of Railtrust Holdings Limited) out of the Scheme's assets.
The Trustee may also pay any fee, remuneration or expenses which it considers reasonable to any of its officers or employees. The Trustee and any officer or employee of the Trustee is entitled to retain beneficially any fee or remuneration which it or he receives.
The expenses of the Scheme shall be apportioned between Sections on a basis which the Trustee decides is equitable (taking into account all relevant factors including the number of Members participating in each Section and the administration expenses attributable to those Members). Expenses properly attributable to a Section shall be met only out of the Section Assets.
On an annual basis the Trustee shall consult with each Pensions Committee (or, if there is no Pensions Committee, the Designated Employer) about the details of the annual budget for expenses in relation to its Section and shall report at the end of the year on actual expenses incurred.
2D Limit of Liability
Neither the Trustee nor its subsidiaries nor any officer or employee of the Trustee or its subsidiaries, nor any member of a Pensions Committee shall be liable for any breach of trust (whether by act or omission) not due to personal conscious wrongdoing or recklessness. No officer or employee of the Trustee or its subsidiaries nor any member of a Pensions Committee who carries on or is involved in the carrying on of the business of professional trustee shall be relieved of liability for breach of trust due to negligence.
2E Trustee Insurance
With the consent of 51% of the Designated Employers the Trustee may insure the Scheme against any loss caused by it or its employees, officers, agents or delegates or any member of a Pensions Committee and may also insure itself and any of its employees, officers, agents or delegates and any member of a Pensions Committee against liability for breach of trust not involving the personal conscious wrongdoing or recklessness of the person concerned (and in the case of a person who carries on or is involved in the carrying on of the business of professional trustee, not involving the negligence of the person concerned). The Designated Employers and the Trustee shall agree the terms of any insurance (including terms as to payment). To the extent that the Trustee is covered by insurance and has secured payment in full from that insurance, it shall waive the protection of Clause 2D (Limit of Liability) and Clause 2F (Trustee Indemnity) shall not apply.
2F Trustee Indemnity
The Participating Employers (in such proportions as the Trustee requires) shall reimburse the Trustee for any expenses and liabilities which it incurs through acting as trustee of the Scheme but which cannot, for any reason, be met out of the Scheme's assets. This does not, however, apply to expenses and liabilities which are due to the personal conscious wrongdoing or recklessness of any officer or employee of the Trustee or its subsidiaries or any member of a Pensions Committee nor, in the case of any officer or employee of the Trustee or any member of a Pensions Committee who carries on or is involved in the carrying on of the business of professional trustee, to negligence.
The liability of the Participating Employers in each Section shall, however, be limited to the part of the total liability that the Trustee, acting on actuarial advice, certifies to be attributable to the Section concerned.
2G Fiduciary Duty
Any power, duty or discretion conferred on the Trustee or on a Pensions Committee by this Pension Trust shall be exercised in accordance with its fiduciary duties to the beneficiaries of the Scheme or the Section concerned.
3A Participation of Participating Employers
The Trustee shall admit to participation in the Scheme any employer which it is required to admit by an order made under paragraph 8 of Schedule 11 to the Railways Act. With the consent of the Inland Revenue the Trustee shall also admit any employer which is engaged in the railway industry within the terms of Schedule 11 to the Railways Act and may also admit any employer who in the opinion of the Trustee is associated with the railway industry to participation in the Scheme on such terms and conditions as it considers appropriate.
3B Participating Employer establishing or participating in a Section
(1) Participating Employer who wants or is required to establish a new Section
Except as provided in this Clause an employer who wants or is required to establish a new Section must enter into a deed with the Trustee ("the Deed of Establishment and Participation") substantially in the form set out in Part 1 of Appendix 3:
(a) agreeing to comply with the Pension Trust;
(b) establishing and naming its Section of the Scheme;
(c) identifying itself as the Participating Employer who is to be treated as the Designated Employer for its Section; and
(d) adopting and agreeing to comply with the rules of one of the Arrangements set out in Appendix 2; and
(e) agrees to apply to become a member of Railtrust Holdings Limited.
The British Railways Board must with effect from 1st October 1994 enter into the Deed of Establishment and Participation set out in Part 2 of Appendix 3.
(2) Participating Employer who wants or is required to participate in an already established Section
An employer who wants or is required to participate in an already established Section must enter into a deed with the Trustee and the Designated Employer for the appropriate Section agreeing to comply with the Pension Trust and the Rules of the Section in which it wants or is required to participate. If the employer is to become the Designated Employer for the Section in lieu of the existing Designated Employer then the deed shall so recite. The Participating Employer shall agree to apply to become a member of Railtrust Holdings Limited and the Participating Employers in the Section shall execute the deed to show their agreement to the change. The new Designated Employer shall notify the Pensions Committee of the change. The Pensions Committee for the Section must consent to the new employer's participation except where the employer is required to participate in the Scheme in which case the Designated Employer shall inform the Pensions Committee.
3C Arrangements
A list of the benefit arrangements available to an employer who wants to establish a new Section and the rules governing each of these Arrangements is set out in Appendix 2.
3D Defined Benefit Arrangement
If a Designated Employer decides to adopt the Defined Benefit Arrangement the Deed of Establishment and Participation shall also set out which of the following options the Designated Employer has chosen to apply to Members of its Section:
(a) Whether or not Pensionable Service shall be contracted-out by reference to the Scheme (in which case Clause 9 (Contracting-out) shall apply).
(b) A Minimum Pension Age, on or between the Member's 60th and 70th birthdays (or earlier if acceptable to the Inland Revenue).
(c) A Member's Contribution Rate, to be either nil or at a specified percentage no greater than 15% of Pensionable Pay.
(d) An Accrual Rate of 1/10th, th or 1/60th.
(e) Provisions for survivors' pensions as follows:
• whether a Spouse's Pension Fraction is to apply when the Member dies before his pension has started. If it is, this shall be ½ or 2/3
• whether a Spouse's Pension Fraction is to apply when the Member dies or after his pension has started. If it is, this shall be ½ or 2/3
• whether a Children's Pension Fraction is to apply. If it is, this shall be ½.
(f) A Lump Sum Death Benefit of nil, 1, 2, 3 or 4 times the Member's Final Average Pay at the date of death.
The Trustee may add to the above options subject to Clause 13 (Changing the Pension Trust and Rules) and to Revenue Approval.
3E Defined Contribution Arrangement
If a Designated Employer decides to adopt the Defined Contribution Arrangement, then the Deed of Establishment and Participation shall set out which of (a) to (c) and (f) of Clause 3D (Defined Benefit Arrangement) it has chosen to apply to Members of the new Section. The Designated Employer shall notify Members of the rate at which it and any other Participating Employers participating in the Section shall contribute to the Section.
3F Participating Employer establishing more than one Section
A Participating Employer may elect to establish one or more Sections which adopt the rules of any of the Arrangements and may choose differently as described in (a) to (f) of Clause 3D (Defined Benefit Arrangement) in respect of each of those Sections.
The Participating Employer's choice under (a) of Clause 3D may not differentiate between Employees who become Members except on the grounds of the nature of their employment or in other circumstances consistent with the Contracting-out Laws.
3G Change of Terms
Subject to Revenue Approval the Designated Employer and the Trustee may enter into a supplemental agreement altering any of the options contained in the Deed of Establishment and Participation. This supplemental agreement shall include a statement of how benefits shall be calculated in respect of Members' Service and contributions before the date of alteration. The Trustee shall notify the Participating Employers and Pensions Committee for the relevant Section of the terms of any supplemental agreement entered into under this Clause 3G.
3H New Designated Employer
The Designated Employer may by deed agree with the Trustee and the Participating Employers participating in its Section that another Participating Employer participating in the Section shall in future be the Designated Employer for the Section. The new Designated Employer shall agree to apply to become a member of Railtrust Holdings Limited and shall notify the Pensions Committee accordingly.
4A Setting up a Pensions Committee
Until the Trustee is notified that a Pensions Committee has been set up for a Section and has delegated powers to it under Clause 2B (Delegation), the Trustee shall itself exercise all powers, duties and discretions which might otherwise be delegated to or imposed on a Pensions Committee.
If a Designated Employer so decides it shall set up a Pensions Committee. The Designated Employer shall notify the Trustee as soon as the Pensions Committee has been set up and at the same time provide the Trustee with the name and address of the Chairman of the Pensions Committee. The Trustee shall then exercise its power of delegation in accordance with Clause 2B. In the case of the 1994 Pensioners "A" and "B" Sections, the Designated Participating Employer is the Secretary of State.
At the time of the exercise of its power of delegation under Clause 2B, the Trustee shall notify the relevant Pensions Committee of each available Pooled Fund.
The composition and administrative provisions governing the Pensions Committee shall be as set out in Appendix 4 except in the case of the 1994 Pensioners "A" and "B" Sections where the composition and administration is as set out in Schedule 1 to the 1994 Pensioners "A" Section.
Any person may be a member of a Pensions Committee regardless of whether he is also a Member (and may benefit from a power which he is involved in exercising as a member of the Pensions Committee) or whether he has a direct or indirect interest in the Section or is a director of a Participating Employer, Railtrust Holdings Limited or the Trustee.
The Designated Employer shall notify the Trustee as soon as possible if the Pensions Committee ceases to exist and with effect from the date it ceases to exist the Trustee shall itself exercise all powers, duties and discretions which might otherwise be delegated to or imposed on a Pensions Committee.
4B Delegation
The Pensions Committee may, when exercising any of its powers, duties or discretions, take professional advice (including advice from an independent actuary) and, with the consent of the Trustee, may delegate its powers, duties and discretions, as it considers appropriate.
4C Expenses
The expenses of each Pensions Committee and of its members shall be met out of the Section Assets.
5A Contributions by Participating Employers
Each Participating Employer must contribute to the Scheme in respect of Members within each Section in which it participates at the rate or rates set out in the Rules for each Section and no Participating Employer can contribute to a Section in which it does not participate.
5B Payment of Participating Employers' Contributions
All Participating Employers' contributions shall be due either at the same times as the Members usually receive remuneration from the Participating Employers or, in the case of any lump sum payments, at the same time as the single lump sum contribution is paid by the Member. Contributions shall be immediately segregated by each Participating Employer from its own assets and held on trust for the Trustee and paid within 7 working days to the Trustee. The Participating Employer shall pay interest on such contributions where payment is late as set out in Clause 5D (Interest on Late Payment).
5C Payment of Members' Contributions
All Members' contributions shall be due and payable at the same times as remuneration from the Participating Employer is usually received and each Participating Employer may deduct the appropriate amount from that remuneration. All amounts so deducted by each Participating Employer shall be immediately segregated by the Participating Employer from its own assets and held on trust for the Trustee and paid within 7 working days to the Trustee. The Participating Employer shall pay interest on such contributions where payment is late as set out in Clause 5D. The Trustee may, however, agree with a Member that his contributions should be paid in some other manner.
5D Interest on Late Payment
Interest shall accrue from 7 working days after the date on which contributions fall due for payment until the date on which payment of the contributions together with interest on those contributions is received by the Trustee. Such interest shall accrue simple at 5% above the sterling base rate published by The Royal Bank of Scotland plc from time to time or at such higher rate as is actually received by the Participating Employer on the contributions. The Trustee shall use all reasonable endeavours to collect contributions within 7 working days of the date on which they fall due. The Trustee may waive payment if it considers the amount of interest to be paid is trivial.
5E Assets held on Trust
The Trustee shall hold all the contributions and other assets which it receives and the property representing them and all the income on trust to pay the benefits under the Scheme.
The assets shall be attributed to the appropriate initial Section in acccordance with the terms of the Transfer Orders and after the effective date of the Transfer Orders the assets shall be dealt with as set out in the Pension Trust and Rules.
The liabilities of each Section to provide benefits to and in respect of Members and former employees and their respective dependants shall be met out of the Section Assets and the Section Assets shall not be applied to or for the benefit of any other Section at any time (other than on a transfer of Member's benefits between Sections).
The Trustee shall maintain records sufficient to show at any time:
(a) in the case of assets other than Unitised Section Assets, the assets of the Scheme attributable to each Section; and
(b) in the case of Unitised Section Assets, the number of units in each Pooled Fund notionally allocated to each Section.
5F Application of Assets
For the purpose of the Scheme the Trustee may in any part of the world alone or together with others acquire and dispose of any property (tangible or intangible, movable or immovable), whether or not it produces income, enter into any contract or incur any obligation, lend or borrow money or other property for any purpose (including acquiring assets), grant any mortgage or charge over or give any right of recourse against any or all of the assets of the Scheme, form and finance any company, carry on and finance any business, insure assets of the Scheme for any amount against any risk and keep assets in nominee names. The Trustee shall have all powers relating to the assets of the Scheme which it would have if it were absolutely and beneficially entitled to the assets of the Scheme.
The Trustee may also at all times and from time to time invest, hold or stand possessed of all or any of the assets of the Scheme in such manner that the said assets, or any of them, may be:
(a) mingled with the assets of any other pension scheme or of any other fund of which the assets are or become vested in the Trustee;
(b) held jointly with assets of another fund; or
(c) otherwise intermixed with assets, investments or property of whatsoever kind and wheresoever situated, without the same being separately designated or allocated as an asset of any particular pension scheme or fund.
The Trustee may not acquire any shares, securities, stocks, bonds or debentures in or issued by any Participating Employer or its holding company or subsidiaries or make any loans to any such company or any Member or acquire any interest in property which is used for the purposes of any business carried on by any Participating Employer or its holding company or subsidiaries other than (i) by means of a discretionary investment manager operating at arm's length, or (ii) in acquiring, developing or improving any interest in real property owned or occupied by or subject to a lease in favour of any Participating Employer participating in the relevant Section or its holding company or subsidiaries of the holding company, or (iii) in investing in a fund which tracks or seeks to track a recognised stock market index, investment trust or unit trust over which no Participating Employer has any direct or indirect control. At all times not more than 5% in aggregate of Section Assets may be invested in this way.
The Trustee shall ensure that the regulations relating to Pooled Funds which are authorised by it enable and oblige the Trustee:
(a) in the case of investment of assets of the Scheme in the Pooled Fund to notionally allocate, cancel and surrender units representing undivided shares in the assets held in the Pooled Fund such that the number of units at any time notionally allocated to a particular Section accurately reflects the proportion of the assets held in the Pooled Funds attributable to that Section;
(b) to value such assets in accordance with best market practice.
5G Consultation with Pensions Committees
This Clause 5G does not apply to the 1994 Pensioners "A" and "B" Sections.
The Trustee shall consult with the Pensions Committee for each Section about the manner in which it exercises its powers under Clause 5F (Application of Assets) in relation to the relevant Section.
The Pensions Committee may from time to time determine an investment policy for its Section to establish the proportion of Section Assets to be held in each of the Pooled Funds and shall obtain the Trustee's approval to that policy. The Trustee may only withhold its approval if in its opinion the proposed policy would be likely seriously to prejudice the security of Members' interests.
The Trustee may after consulting with all the relevant Pensions Committees (i) establish new common investment funds or (ii) extend the scope of an existing Pooled Fund. It shall always establish a new Pooled Fund if at least half of all the Pensions Committees so request. The Trustee shall notify the Pensions Committee of any new Pooled Fund.
The Trustee shall provide quarterly performance reports and fund managers' reports to each Pensions Committee and shall provide such further information to the Pensions Committee as the Pensions Committee reasonably requests.
6. ACCOUNTS, ACTUARIAL VALUATIONS AND ANNUAL REPORTS
6A Accounts
The Trustee shall appoint an auditor to the Scheme who must be a person who is qualified by law to act as auditor of a company but may not be a Member or Participating Employer or an employee or director of a Participating Employer or of the Trustee or its subsidiaries.
The auditor shall prepare and audit the annual accounts of the Scheme and shall submit them to the Trustee within 6 months of the date as at and to which the accounts are drawn up. The audited accounts shall be drawn in such a way as to show what part or proportion of the assets of the Scheme relates to each Section and shall comply with the laws as to the disclosure of information set out in the Pensions Act ("the Disclosure Laws").
As soon as they are available, the Trustee shall give a copy of that part of the audited accounts which relates to a particular Section to the Chairman of the Pensions Committee and the Designated Employer for that Section. The Trustee shall also give a copy of the parts of the audited accounts which relate to the 1994 Pensioners "A" and "B" Sections to the Secretary of State as soon as they are available.
6B Actuarial Valuations
The Trustee shall appoint an actuary to the Scheme who must be a Fellow of the Institute or Faculty of Actuaries or a firm of, or a company employing, those Fellows or a person who holds a qualification obtained outside the United Kingdom which is recognised by the Institute or Faculty of Actuaries as being adequate for the performance of the role of actuary to the Scheme. In relation to the 1994 Pensioners "A" and "B" Sections and any other Section for which the Deed of Establishment and Participation so provides, the Actuary shall act jointly with the Government Actuary. In the context of those Sections references to "the Actuary" are to the Actuary and the Government Actuary and advice given by the Government Actuary in relation to those Sections is without prejudice to his powers and duties to give advice as a government adviser and vice versa.
The Trustee shall obtain actuarial valuations of the Scheme from the Actuary at intervals of not more than 3 years from the date as at which the last valuation was prepared.
The actuarial valuation for the Scheme shall be drawn in such a way as to enable each Section to be considered separately. Before preparing the valuation the Actuary shall consult with the Trustee, the Designated Employers and the Pensions Committees including consulting on the basis, methodology and assumptions for the valuation.
The Trustee shall supply a copy of each valuation to each Designated Employer and to the Chairman of each Pensions Committee, but the copy shall not include those parts of the valuation which deal only with the other Sections. The Trustee shall provide a Designated Employer or a Pensions Committee with a full copy of the valuation of the Scheme if requested to do so by either of them.
A Designated Employer may at any time obtain a further actuarial valuation from the Actuary or from another actuary in respect of its Section (except that only a valuation obtained from the Actuary shall count for the purposes of the 3-yearly valuation under the second paragraph of this Clause 6B). The expenses for any further valuations shall be met by the Participating Employers in that Section. The Pensions Committee may at any time obtain a further actuarial valuation in respect of its Section from the Actuary or from another actuary if it considers it necessary and appropriate, the expenses for which shall be payable out of the Section Assets.
6C Annual Reports
The Trustee shall prepare annual reports in relation to the Scheme which shall contain:
(a) a copy of the audited accounts;
(b) a copy of the latest actuarial statement;
(c) further information as required by the Disclosure Laws.
The annual reports shall be prepared within 7 months after the end of the year to which they relate. The Trustee shall provide a copy of parts of the annual report which relate to a particular Section to the Chairman of the Pensions Committee and each Designated Employer for that Section. The Trustee shall provide a Designated Employer or a Pensions Committee with a full copy of the annual report relating to the whole Scheme at any time if requested to do so by either of them.
7. GENERAL PROVISIONS ABOUT SCHEME BENEFITS
7A Payment of Benefits
Except where benefits payable under the rules of the Defined Contribution Arrangement are secured by buying an annuity contract, pensions are payable every 4 weeks in arrears. A proportionate payment shall be made for any period of less than 4 weeks. Pension shall be paid for the 4 week period in which a pensioner dies.
In the event that any payment is paid late, the Trustee may increase it to take account of the late payment.
7B Deduction of Tax
The Trustee may deduct from any payment under the Scheme any tax for which it may be liable in respect of that payment.
7C Beneficiary who is Incapable
If the Trustee considers, having regard to Clause 2G (Fiduciary Duty), that a beneficiary cannot look after his affairs (by reason of illness, mental disorder, minority, bankruptcy or otherwise) it may use any amounts due to the beneficiary for his benefit or pay them to some other person or persons to do so. The receipt of the person to whom any amount is paid shall discharge the Trustee from any obligation in respect of the amount concerned. The Trustee may also make for the beneficiary any choice which the beneficiary has under the Scheme.
7D Benefits not Assignable
If a person tries to assign or charge his benefit payable under the Scheme or if any event occurs by which all or part of the benefit would become payable to some other person, the benefit shall cease to be payable. An equivalent benefit shall be paid to, or used for the benefit of, one or more of the persons concerned and that person's Dependants or Eligible Dependants (as defined in the Rules), in such shares as the Trustee decides. But the equivalent benefit may not be paid to anyone in whose favour the person concerned tried to assign or charge the benefit.
This Clause does not apply to GMP.
7E Forfeiture of Benefits
Any payment which is not claimed within 6 years from the date it was due to be paid shall cease to be payable, unless the Trustee decides otherwise.
7F Notices
Any notice required to be given by Members shall be given in the form and within the time limit (if any) set out in the Rules or determined by the Trustee.
7G Inland Revenue Limits
The Scheme is designed for Revenue Approval and the Trustee shall comply with all undertakings which the Inland Revenue require it to give as a condition of approving the Scheme.
The benefits set out in the Pension Trust and Rules are subject to all limits imposed by the Inland Revenue as to nature and amount either generally or specifically in relation to the Scheme. In particular, if a Member transfers between Participating Employers in different Sections, the maximum pension payable and the maximum lump sum which the Member may choose to commute under the Rules may have to be restricted. A statement of benefit limits, as required by the Inland Revenue, is included in Appendix 6.
7H Protected Persons
Where, in relation to a Protected Person, the provisions of this Pension Trust or the Rules do not satisfy the requirements of the Railway Pensions (Protection and Designation) Order 1994[9], then the Pension Trust and the Rules shall be operated in relation to that person in such a way as to ensure that they do comply with that Order.
8. SCHEME BENEFITS — POWERS OF TRUSTEE
8A Commutation Triviality
The Trustee may pay a person a lump sum instead of a trivial pension which has become payable to that person and any trivial pensions payable on the person's death. The Trustee shall convert pension to lump sum on a basis certified as reasonable by the Actuary and approved by the Inland Revenue.
Subject always to the Contracting-out, Revaluation and Preservation Laws and to Revenue Approval, a pension may be treated as trivial only if all benefits payable to the person concerned under the Scheme and all other occupational pension schemes and free-standing AVC schemes approved under section 591 of the Taxes Act relating to the same employment are less in value than a pension of £260 a year or any greater amount consistent with those Laws and Revenue Approval.
A pension that includes GMP can only be treated as trivial in the circumstances permitted by the Contracting-out Laws.
8B Transfers-in
Except in the case of a Section which has adopted the rules of the Defined Contribution Arrangement, the Trustee must accept a transfer of assets in respect of a direction of the Secretary of State or in respect of a Transfer Order and in the case of Members who are Protected Persons shall provide benefits in respect of those assets as required by the Railway Pensions (Protection and Designation) Order 1994.
In all other circumstances, if the Designated Employer agrees and provided the transfer is made from an arrangement permitted by the Inland Revenue, the Trustee may accept a transfer of assets in respect of a person from another occupational pension scheme or a personal pension scheme or from another Section, or the surrender value of a Buy-out Policy or retirement annuity contract bought in the person's name, and shall provide such benefits consistent with Revenue Approval and with the Preservation, Revaluation and Transfer Value Laws as the Trustee decides are appropriate (after considering actuarial advice) and having regard to the amount of the transfer payment received. The Trustee shall collect transfer payments as promptly as possible.
Where the transferred assets represent GMPs, the transferred GMPs shall be revalued as described in Clause 9F (Transferred GMPs).
Where the transferred assets represent protected rights, the protected rights shall be used to provide GMPs equal to those to which the Member and his spouse would have been treated as entitled under the transferring scheme had the transfer not been made. Those GMPs shall be revalued as described in Clause 9F (Transferred GMPs).
8C Transfers-out
This Clause does not apply to a Section which has adopted the rules of the Defined Contribution Arrangement nor to the 1994 Pensioners "A" and "B" Sections.
1 Transfers to another scheme or other arrangement or to a Section which has adopted the rules of the Defined Contribution Arrangement
(a) Transfers (not following a compulsory change in employment)
If the benefits of a Member are transferred, the amount of the transfer payment will be equal in value to the cash equivalent of the Member's benefits calculated in accordance with the Transfer Value Laws. The Designated Employer may agree to the transfer of a higher amount (but not exceeding a share of fund) provided that the Pensions Committee is satisfied that the benefits to be provided in respect of past service in the receiving scheme, arrangement or Section are reasonable in relation to the transfer payment paid.
(b) Transfers (following a compulsory change in employment)
If benefits are transferred following a compulsory change in employment then the amount of the transfer payment will be equal in value to the cash equivalent of the Member's benefits calculated in accordance with the Transfer Value Laws. The Pensions Committee may decide, however, that the transfer payment should be increased to an amount equal to the Member's Past Service Reserve, or such higher amount as the Designated Employer agrees (but not exceeding in either case a share of the fund) and provided that the Pensions Committee is satisfied that the benefits to be provided in the receiving scheme, arrangement or Section will be of the same value overall to the benefits provided under the transferring Section.
2 Transfers between Sections which have adopted the rules of the Shared Cost Arrangement or of the Defined Benefit Arrangement
(a) Transfers (not following a compulsory change in employment)
If the benefits of a Member who has retained his rights under the Railway Pensions (Protection and Designation) Order 1994 are transferred within 15 months of leaving Service then the amount of the transfer payment will be equal to the Member's Past Service Reserve. Otherwise, the amount of the transfer payment will be equal in value to the cash equivalent of the Member's benefits calculated in accordance with the Transfer Value Laws. The benefits to be provided under the receiving Section will be calculated using the same actuarial basis and assumptions as the Actuary used to determine the amount of the transfer payment.
The Designated Employer may in either case agree to a higher transfer payment (but not exceeding a share of the fund).
The Trustee may, having regard to Clause 2G, agree to a higher transfer payment (but not exceeding a share of fund) in relation to a Member who has retained his rights under the Railway Pensions (Protection and Designation) Order 1994 whose benefits are transferred within 15 months of leaving Service provided that the higher transfer payment:—
(i) does not exceed the amount which is sufficient to credit the Member with Pensionable Service on a year for year basis in respect of the period of Pensionable Service in relation to which the transfer is made adjusted to take account of any difference in benefit structure between the transferring and receiving Sections; and
(ii) shall not cause an increase in contributions under Rule 3A.
(b) Transfers (following a compulsory change in employment)
If the benefits of a Member who is a Protected Person are transferred following a compulsory change in employment on or before 30th September 2003, the amount of the transfer payment will be calculated on a share of fund basis.
If benefits are transferred following a compulsory change in employment in the case of a Member who is not a Protected Person or who is a Protected Person but does not transfer on or before 30th September 2003 then the amount of the transfer payment will be equal to the Member's Past Service Reserve unless the Designated Employer agrees to a higher transfer payment (not exceeding a share of the fund).
The benefits to be provided under the receiving Section will be calculated using the same actuarial basis and assumptions as the Actuary used to determine the amount of the transfer payment and will be actuarially equivalent to the amount transferred to the receiving Section.
3 Initial transfers to Sections as a consequence of Transfer Schemes
In any case where the first transfer of Members' benefits are made from the Section established by the British Railways Board adopting the Rules of the Shared Cost Arrangement to another Section as a consequence of a Transfer Scheme the amount of the transfer payment will be calculated on a share of fund basis determined on the same actuarial basis as transfers under the Transfer Orders.
For the purposes of this paragraph 8C 3 "Transfer Scheme" means a transfer scheme made pursuant to section 85 of the Railways Act on or after 1st April 1994.
4 Pensioners and Deferred Pensioners
Where there is a transfer payment following a change of employment in circumstances where the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply the Trustee will (taking account of the factors below) decide the liabilities (if any) in respect of relevant pensioners and deferred pensioners to be transferred to the new Employer, subject (in the case of a transfer between Franchise Operators) to the agreement of the Franchising Director. The factors to be taken into account above are the former employment of the relevant pensioners and deferred pensioners and the views of the new Employer concerned.
The amount of the transfer payment to be made in respect of the liabilities referred to above will be calculated on a share of fund basis unless the Trustee having consulted the Actuary otherwise determines.
To the extent liabilities in respect of pensioners and deferred pensioners are not transferred the Trustee will pay benefits out of the Section in which case the Pension Trust and the Rules of the Section will continue to apply.
5 Definition of Past Service Reserve
For the purposes of this Clause 8C "Past Service Reserve" means in all cases an amount equal to the value of benefits payable under the Section to and in respect of a Member based on the Member's actual Pensionable Service, calculated by the Actuary using assumptions which include an allowance for projected increases in the Member's Final Average Pay and increases to pensions in accordance with the Rules and adjusted to allow for the period from the date of calculation to date of payment.
6 Notification by Actuary
The Actuary will notify the Trustee and the Pensions Committees of the methods and assumptions used in calculating transfer payments and of any change to those methods and assumptions, together with the date from which the change operates.
7 General Provisions on Transfers
(a) Protected Person
In any case where the Railway Pensions (Protection and Designation of Schemes) Order 1994 requires the Trustee to transfer an amount higher than the amount specified above or to provide benefits following receipt of a transfer payment which are different from those specified above, the Trustee will transfer that higher amount or provide those different benefits.
(b) Share of Fund
Other than transfers under 8C 3 above, in any case where the amount of the transfer payment is calculated on a share of fund basis, the amount will be as determined by the Actuary after taking into account all relevant matters including the resources of the relevant Section.
(c) Past Service Reserve
In any case where the amount of a transfer payment based on the Member's Past Service Reserve is greater than a transfer payment based on a share of fund, the transfer payment will be limited to the transfer amount based on a share of fund. In these circumstances benefits to be granted in the receiving scheme, arrangement or Section will be equivalent in value to the amount transferred.
(d) Reduction of Cash Equivalent
In accordance with the Transfer Value Laws the cash equivalent provided will be reduced in the event of a deficiency provided the Pensions Committee agrees.
(e) Compulsory change in employment
For the purposes of this Clause 8C "compulsory change in employment" means in relation to a Member a change in employment following a transfer, sale or disposal of shares of an Employer (including where the Employer is a Franchise Operator) where the Member can no longer continue to accrue benefits under the Section.
8D Buy-Outs
Except in the case of a Section which has adopted the rules of the Defined Contribution Arrangement, instead of providing benefits under the Scheme in respect of a beneficiary, the Trustee may buy a Buy-out Policy in the name of the beneficiary from the UK office or branch of an Insurance Company.
A Buy-out Policy must satisfy the Transfer Value Laws and the requirements of the Inland Revenue. In particular, the policy must provide that the annuities payable to or for the benefit of the Member and the Member's spouse shall be at least equal to their GMP under the Scheme, including revaluation in accordance with the Contracting-out Laws.
Where the Preservation and Contracting-out Laws so require, the Trustee shall obtain the consent of the Member or other beneficiary before buying the policy.
The Trustee must be reasonably satisfied that the amount paid to the Insurance Company is at least equal in value to the benefits that would otherwise have been provided in respect of the beneficiary under the Scheme.
9A Overrides other Provisions
If any Member's Service becomes Contracted-out by reference to the Scheme under the Pensions Act this Clause shall override any inconsistent provisions of the Pension Trust and Rules (other than Clause 8A (Commutation: Triviality)) except where those provisions provide contracted-out benefits additional to those set out in this Clause 9.
9B GMPs
If a Member has a guaranteed minimum in relation to the pension provided for the Member under the Scheme in accordance with sections 13—16 of the Pensions Act:
(a) the weekly rate of the Member's pension (excluding pension provided by Additional Voluntary Contributions) from age 65 if a man or 60 if a woman ("State Pension Age") shall not be less than the guaranteed minimum;
(b) if the Member is a man and dies leaving a widow, the weekly rate of her pension (excluding pension provided by Additional Voluntary Contributions) shall not be less than half the Member's guaranteed minimum;
(c) if the Member is a woman and dies leaving a widower, the weekly rate of his pension (excluding pension provided by Additional Voluntary Contributions) shall not be less than half the part of the Member's guaranteed minimum that is attributable to earnings for the tax year 1988—89 and subsequent tax years.
9C Late Retirement
If a Member's pension starts after State Pension Age and the period of postponement is at least 7 weeks, the Member's GMP shall be increased from State Pension Age as follows:
(a) the part of the GMP attributable to earnings for the tax year 1988—89 and subsequent tax years shall be increased by the percentage specified in any orders made by the Secretary of State under section 109 of the Pensions Act during the period of postponement;
(b) the whole GMP (including the increase described in (a)) shall be increased by 1/7% for each complete 7 days of postponement.
9D Early Leavers
If a Member leaves Contracted-out Service under the Scheme before State Pension Age, the Member's GMP accrued up to leaving shall be increased by the appropriate percentage specified in the last order made under section 148 of the Social Security Administration Act 1992[10] to come into force before the tax year in which the Member reaches State Pension Age or dies, if earlier. If, however, a GMP is to be transferred to a scheme, or bought out by a Buy-out Policy, under which the GMPs of early leavers are increased by another method, the Trustee may adopt that other method for the GMP in question.
9E Anti-Franking
No pension payable under the Scheme shall be less than is necessary to comply with the anti- franking requirements set out in Part IV Chapter III of the Pensions Act.
9F Transferred GMPs
Where a GMP has been transferred from another occupational pension scheme or a Buy-out Policy, the Scheme shall increase this GMP for each complete tax year after the date on which the Member left Contracted-out employment under the scheme in which the transferred GMP accrued up to State Pension Age (or earlier death).
If the transfer is from another scheme, the GMP shall be increased by the appropriate percentage specified in the last order made under section 148 of the Social Security Administration Act 1992 to come into force before the tax year in which the Member reaches State Pension Age or dies, if earlier, except that, where the Contracting-out Laws allow, the Trustee may for all or any of the tax years in question increase all or part of the transferred GMP by the method by which the GMP was being increased in the transferring scheme.
If the transfer is from a Buy-out Policy, the GMP shall be increased by the same method as was in use under the policy or such other method as is allowed under the Contracting-out Laws.
9G Other Contracting-out Requirements
This Pension Trust and the Rules have been drafted to meet the contracting-out requirements of the Pensions Act and any additional requirements contained in Memorandum No.77[11] issued by the Joint Office of the Occupational Pensions Board and the Inland Revenue Pension Schemes Office. But in the event of any conflict between the aforementioned requirements, the Trustee shall operate the Scheme in conformity with those requirements regardless of any other provisions of the Scheme except those necessary for Revenue Approval.
10. CEASING TO PARTICIPATE
10A When Participation Ceases
Other than as provided under the Railway Pensions (Protection and Designation) Order 1994 a Participating Employer may cease to participate in a Section by giving not less than 3 months' written notice to the Trustee and to the Pensions Committee. The Trustee and the Pensions Committee may in their discretion accept shorter notice if they consider, exceptionally, that it is appropriate.
The Trustee shall by 3 months' written notice require a Participating Employer to cease participating on any date if its continued participation would prejudice Revenue Approval. With the consent of the Inland Revenue the Trustee may permit the continued participation of a Participating Employer in a Section where the Participating Employer ceases to be associated with the Designated Employer, for such period and on such terms as the Trustee determines. Other than as provided under The Railway Pensions (Protection and Designation) Order 1994[12] the Trustee may by 3 months' written notice require a Participating Employer to cease participation if it is in liquidation or if a railways administration order (as defined in section 59 of the Railways Act 1993) has been made in respect of it or if a Participating Employer is in default of its obligations under the Pension Trust and Rules and has not taken such steps as the Trustee has required to remedy the default.
10B One Participating Employer in a Section ceases to Participate
If a Participating Employer, being one of 2 or more Participating Employers participating in a Section, ceases to participate in the Section, each Member in employment with that Participating Employer shall be treated as if, on the day the Participating Employer ceased to participate, the Member had left Service with deferred benefits or a preserved pension or, in the case of a Section which has adopted the rules of the Defined Contribution Arrangement, preserved benefits or a refund of contributions, as appropriate, under the "Early Leavers" Rule. The Trustee may decide, however, in the case of any Member who would otherwise have received a refund of contributions to provide the Member with a preserved pension.
Alternatively the Trustee may, after consulting the relevant Designated Employer and Pensions Committee, pay benefits out of the Section in respect of some or all of the Members and former employees of that Participating Employer. In this case their benefits shall continue to be governed by the Pension Trust and Rules of the Section.
Before it ceases to participate a Participating Employer who is the Designated Employer shall by deed agree with the Trustee and the Participating Employers who are continuing to participate in the Section which of them is to be the new Designated Employer for the Section after it has ceased to participate and the new Designated Employer shall apply to become a member of Railtrust Holdings Limited. The new Designated Employer shall notify the Pensions Committee accordingly.
The Trustee may, after consulting the Designated Employer, make transfer payments as described in Clause 8C (Transfers-out), or buy Buy-out Policies as described in Clause 8D (Buy-outs), in respect of all or any of the Members concerned.
10C All Participating Employers in a Section cease to Participate
If all Participating Employers in a Section cease to Participate, Clause 11 (Winding-up a Section where all Participating Employers cease to Participate) shall apply except where all the Participating Employers are franchise operators when Clause 8C shall apply.
10D Participating Employer transfers between Sections
If a Participating Employer ceases to participate in one Section and immediately starts to participate in another Section, the Members employed by that Participating Employer at the date of the change shall have their benefits calculated as if all their Pensionable Service had been with the new Section except that where the Rules relating to the new Section are different from those relating to the previous Section, each Member's benefits accrued to the date of the change may be adjusted, as decided by the Trustee after taking actuarial advice.
The Trustee, acting on actuarial advice, shall transfer Section Assets from the First Section to the Second Section on the basis set out in Clause 8C (Transfers-out), calculated at the date the Participating Employer ceases to participate in the first Section.
After consulting with the Pensions Committees of the Sections concerned the Trustee shall decide which assets shall be transferred.
11. WINDING-UP A SECTION WHERE ALL EMPLOYERS CEASE TO PARTICIPATE
11A All Participating Employers in a Section cease to Participate
Except (i) in the case of the 1994 Pensioners "A" and "B" Sections where Rule 16A of those Sections shall apply or (ii) where Clause 12 applies if all the Participating Employers in a Section cease to participate in that Section, benefits shall cease to accrue under the Section for all the Members and former employees of the Participating Employers. The Trustee shall wind-up the part of the Scheme appropriate to the Section as set out in the rest of this Clause.
The Trustee may defer winding-up the Section for so long as it sees fit, and in the meantime provide, out of the Section Assets, benefits for the beneficiaries concerned in accordance with the Pension Trust and Rules as if each Member in employment with a Participating Employer had left Service on the day the Participating Employer ceased to participate with deferred benefits or a preserved pension or, in the case of a Section which has adopted the rules set out at Appendix 2 Part 3, preserved benefits or a refund of contributions, as appropriate, under the "Early Leavers" Rule. In such a case the Trustee may under Clause 13 (Changing the Pension Trust and Rules) amend the Rules applying to these beneficiaries as it sees fit but not so as to impose any further liability on a Participating Employer.
11B Expenses and Sums Due
The Trustee shall first pay all sums due before the Participating Employers ceased to participate in the Section, including lump sums in respect of those Members who participated in the Section and who have died within 2 years before the Participating Employers ceased to participate in the Section. The Trustee shall then set aside sufficient assets to pay the expenses of the winding-up. The Trustee shall then use the rest of the Section Assets as described below.
11C Buying Annuities
The Trustee shall buy annuity or insurance policies in the names of beneficiaries.
These policies shall be with the UK office or branch of an Insurance Company. The policies shall be consistent with the Preservation Laws, the Contracting-out Laws and with Revenue Approval and shall provide benefits as nearly as practicable the same as the entitlements under the "Early Leavers" Rule of that Section.
If the Section Assets are insufficient, then unless the Rules of the Section specify a different order of priority to apply on winding-up, the following benefits under the Scheme shall be provided first and in the following order of priority (1) any benefits in respect of pensioners and of Members who reached Minimum Pension Age before the Participating Employers ceased to participate in the Section and (2) GMPs not yet payable, state scheme premiums and equivalent pension benefits for periods of non-participating employment under the National Insurance Act 1965[13].
11D Additional Voluntary Contributions
Unless either otherwise specified in the Rules or otherwise required by the Contracting-out Laws, where a Member has paid Additional Voluntary Contributions and those Additional Voluntary Contributions have been invested separately from all the other assets of the Scheme, the proceeds shall be used separately to provide additional benefits for, or in respect of, the Member.
The additional benefits shall be consistent with Revenue Approval and shall comply so far as possible with any wishes made known by the Member in writing to the Trustee.
11E Transfers
The Trustee may transfer assets (including any assets applied under Clause 11F) to some other scheme, arrangement or Section in accordance with Clause 8C (Transfers-out), or in such other way as the Trustee may decide, instead of providing benefits as described in Clauses 11C (Buying Annuities) and 11D (Additional Voluntary Contributions) except that if the Section is the last Section being wound-up GMPs may not be transferred to another scheme without the approval of the Occupational Pensions Board under section 50(1) of the Pensions Act.
If the Trustee having taken actuarial advice so decides the liabilities in respect of some Members and former employees of any Participating Employer shall be met by a transfer in accordance with the above paragraph and the liabilities in respect of the remaining Members and former employees shall be met as described in Clauses 11C (Buying Annuities) and 11D (Additional Voluntary Contributions).
If the last Section has been wound-up the Member's right to a transfer or "buy-out" under the Rules shall be subject to any power which the Occupational Pensions Board has to extend the period within which the Trustee has to do what the Member requires.
11F Surplus Assets on Winding-up
If any of the Section Assets remain they shall be applied as set out in the Rules of the Section. Any additional benefits shall be secured under Clause 11C (Buying Annuities) or 11E (Transfers), as determined by the Trustee.
11G GMPs
If the Section Assets are insufficient to provide in full the GMPs and benefits to be provided before GMPs in accordance with Clause 11C (Buying Annuities), the Participating Employers participating in the Section shall immediately pay to the Trustee, in the proportions decided by the Trustee, the amount specified by the Trustee as necessary to provide the GMPs and those benefits in full.
If the last Section has been wound-up, (or if the Scheme ceases earlier to be a Contracted-out Scheme) the Trustee may pay state scheme premiums under the Pensions Act to reinstate any Members and their widows for earnings related benefits in the state scheme. If the Trustee pays state scheme premiums, the benefits otherwise to be provided on termination shall be reduced as the Trustee considers appropriate, to take account of the GMPs extinguished. Any reduction in benefits shall be consistent with the Contracting-out and Preservation Laws and the requirements of the Occupational Pensions Board.
11H Trivial Benefits
The Trustee may commute trivial benefits for a lump sum under Clause 8A (Commutation: Triviality) whether or not the benefits have become payable.
11I Defined Contribution Arrangement
In the case of a Section for which a Participating Employer has adopted the rules of the Defined Contribution Arrangement, Rule 18 of the rules of that Section shall apply in place of Clauses 11A to 11H above.
12. CHANGE OF FRANCHISE OPERATOR OR SALE OF BUSINESS
12A Participating in a Section
If Employees of an Employer participating in a Section change their employment in circumstances where the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply then Clauses 10B, 10C and 11A will not apply where the new employer enters into a deed with the Trustee agreeing to participate in that Section and to comply with the Pension Trust and the Rules of the Section.
If the new employer is the only Employer participating in the Section it will become the Designated Employer in lieu of the former Designated Employer and the new Employer will apply to become a member of Railtrust Holdings Limited and inform the Pensions Committee.
If there is more than one new Employer then Clause 3B(2) shall apply.
12B Change of Franchise Operator
In circumstances where there is to be a change of Franchise Operator and either Clause 12A or Clause 8C above apply , then the Franchising Director may require a copy of the latest acturial valuation in relation to the Section and confirmation by the Actuary that there has been no material change since the date of that last valuation which would affect the funding position of that Section. If the Franchising Director requires the Trustee will obtain a further actuarial valuation or will provide further information.
13. CHANGING THE PENSION TRUST AND RULES
13A Changing the Pension Trust or Rules generally
The Trustee may by deed, subject to the restrictions set out below and to Inland Revenue consent, change any of the trusts, powers and provisions of the Pension Trust or Rules provided that the Trustee acting on professional advice determines that the change is trivial or is required by law or in order to retain Revenue Approval. Otherwise, the Trustee must first obtain the consent of the Designated Employers except that the Trustee may (having considered actuarial advice) amend Schedule 5 and Schedule 7 of the Rules of any Section which has adopted the rules of the Shared Cost Arrangement, without the Designated Employer's consent. The Trustee shall notify each Designated Employer and each Pensions Committee of any change made under this paragraph. But any change under this Clause which has the effect of changing the Rules of the 1994 Pensioners "A" and "B" Sections requires the consent of the Secretary of State.
13B Changing only the Rules of a Section
The Trustee, the Designated Employer and the Pensions Committee for a Section shall by deed, subject to the restrictions set out below and to Inland Revenue consent, change any of the trusts, powers and provisions of the Rules of the relevant Section which the relevant Designated Employer and the Pensions Committee request to be made unless the Trustee considers that in all the circumstances the change would be improper or that it would not be in the best interests of the Members and beneficiaries of the Section. The Trustee shall notify all the Participating Employers participating in the Section of the change.
For the purposes of the 1994 Pensioners "A"and "B"Sections the Designated Employer is the Secretary of State.
13C Restrictions on Changes
No change may be made which:
(i) varies the main purpose of the Scheme to provide pensions and other benefits for and in respect of Members;
(ii) permits payment of assets to Participating Employers other than as already described under the Pension Trust and Rules or the application of assets other than for the purposes of the Scheme;
(iii) reduces without the person's consent the benefits in respect of a person already receiving a pension at the date of the change;
(iv) conflicts with any provisions which have effect by virtue of an order (other than the Railways Pension Scheme Order 1994[14] and the Schedule to it) made by the Secretary of State under Schedule 11 to the Railways Act;
(v) prejudices Revenue Approval;
(vi) in respect of a Protected Person, varies, cancels or overrides or would have the effect of varying, cancelling or overriding the purpose or intent or terms of, or any definition used in, any of the Clauses of the Pension Trust or Rules of the Shared Cost Arrangement or the 1994 Pensioners "A" and "B" Sections which are set out in Appendix 8, without the prior written consent of at least 75% of all the directors of the Trustee;
(vii) alters the powers, duties and discretions of the Actuary or the Trustee without the prior written consent of 75% of all the directors of the Trustee;
(viii) has the effect of replacing the Trustee unless the replacement trustee is a corporate body governed by a Memorandum and Articles of Association identical to those which govern the outgoing trustee and the Secretary of State has consented to the assignment to the replacement Trustee of the benefit of the guarantee in respect of the 1994 Pensioners "A" and "B" Sections.
In addition to the restrictions on amendments set out above;
(a) the restrictions set out in Appendix 7 apply to any amendment which affects any Protected Person; and
(b) no amendment may be made to Clause 8C in relation to a Protected Person which would have the effect of reducing the amount of the transfer payment as described in that Clause being an amount less than the amount permitted under the terms of the Railway Pensions (Protection and Designation of Schemes) Order 1994.
14. GOVERNING LAW
English law governs the Scheme and its administration.
Notes:
[3] 1993 c. 48. back
[4] 1982 c. 50. back
[5] 1993 c. 48. back
[6] 1993 c. 43. back
[7] 1988 c. 1. back
[8] 1925 c. 19. back
[9] S.I. 1994/1432. back
[10] 1992 c. 5. back
[11] Copies of Memorandum No. 77 are available from the Occupational Pensions Board, PO Box 2EE, Newcastle-upon-Tyne, NE99 2EE. back
[12] S.I. 1994/1432. back
[13] 1965 c. 51. back
[14] S.I. 1994/1433. back | |
